Stocks bounced off the lows of the session, but ended in the red, as disappointing economic news halted the market's rally. Merck ( MRK)sold off 6%, which in turn hit the blue chips, on news that a study of vorapaxar, an anticlotting pill that had potential for $5 billion in annual sales, was halted and a second trial narrowed in scope, limiting the drug's possible use.

The Dow Jones Industrial Average ended down 23.54 points, or 0.20%, to close at 11,731. The S&P 500 fell 2.20 points, or 0.17%, to close at 1283, and the NASDAQ was down 2.04 points, or 0.07%, to finish at 2735. Among key S&P sectors, materials, health care and financials fell, while consumer staples rose.

CBOE Volatility Index ( VIX) closed up 0.92%, at $16.39, on overall put volume of 97,000 contracts compared to 277,000 call contracts, with February 35 calls as the most actively traded series on 32,100 contracts. 60-implied volatility is trading at 72, while 90-day is at 67, suggesting higher price movement in the front months as we move through earnings.

The SPDR S&P 500 ETF ( SPY) closed down $0.21, at $128.37, on overall put volume of 886,000 put contracts compared to 528,000 call contracts. SPY January call option implied volatility is at 12, February calls are at 14 and March calls are 14, below its 26-week average of 21.

The PowerShares QQQ Trust ( QQQQ) options are priced for continued trending higher stock prices. The Qs are up $0.02, at $56.58. January call option implied volatility is at 13, February is at 14 and March at 16, compared to its six-month average of 21, suggesting decreasing price movement.

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